Chapter 9 Topic 11 - Causation IC = Insurance Contact, PP = Public Policy, HoL = House of Lords, CoA = Court of Appeal, SC = Supreme Court, PC = Proximate Cause Proximate Cause Rule Insured must show that it is more probable than not that the loss was caused by a peril covered by IC (Clowrange v CGU Insurance Plc (2001) – Colman J) Only causes which are proximate – not remote – are covered Two Q’s to ask: 1. What peril have insurers agreed to cover? – contract 2. Was loss caused by that peril? Marsden v City and County Insurance Co (1865) o mob damaged window due to fire in a nearby building o riot = cause, not fire not covered o same principle: security reduced due to fire – thieves able to enter and steal goods or goods placed outside to save them and stolen – theft, not fire = proximate cause Winicofsky v Army and Navy General Assurance Assocn Ltd (1919) o theft policy excluded loss ‘occasioned by hostilities’ – air raid burgled – claim upheld cause = theft, air raid just made job easier Identify cause of loss: Lawrence v The Accidental Insurance Co Ltd (1881) – Watkin Williams J o impracticable to go back cause upon cause – would lead back to birth Dudgeon v Pembrok (1874) – Blackburn J o loss typically occurs as a result of a series of events
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Chapter 9 Topic 11 - Causation
IC = Insurance Contact, PP = Public Policy, HoL = House of Lords, CoA =
Court of Appeal, SC = Supreme Court, PC = Proximate Cause
Proximate Cause Rule
Insured must show that it is more probable than not that the loss
was caused by a peril covered by IC (Clowrange v CGU Insurance
Plc (2001) – Colman J)
Only causes which are proximate – not remote – are covered
Two Q’s to ask:
1. What peril have insurers agreed to cover? – contract
2. Was loss caused by that peril?
Marsden v City and County Insurance Co (1865)
o mob damaged window due to fire in a nearby building
o riot = cause, not fire not covered
o same principle:
security reduced due to fire – thieves able to enter
and steal goods or goods placed outside to save
them and stolen – theft, not fire = proximate cause
Winicofsky v Army and Navy General Assurance Assocn Ltd
(1919)
o theft policy excluded loss ‘occasioned by hostilities’ – air
raid burgled – claim upheld cause = theft, air raid just
made job easier
Identify cause of loss:
Lawrence v The Accidental Insurance Co Ltd (1881) – Watkin
Williams J
o impracticable to go back cause upon cause – would lead
back to birth
Dudgeon v Pembrok (1874) – Blackburn J
o loss typically occurs as a result of a series of events
o ship left London in bad condition took on water in rolling
seas unmanageable = distress thick weather +
distress = going ashore
Parties can agree the test for causation in contract – if they don’t there
are judicial principles
*Iondides v The universal Marine Ins Co Ltd (1863)–Willes J
o look exclusively at the proximate and immediate cause of
the loss
MIA s 55(1) – incorporates proximate cause – unless otherwise
agreed by parties
o liable for loss proximately caused by a peril insured against
– not liable for loss not proximately caused by a peril
insured against
Lawrence v The Accidental Insurance Co Ltd (1881)
o L had an epileptic seizure – fell on platform at waterloo =
death by train accident covered by personal accident
policy
Winspear v The Accident Insurance Co Ltd (1880)
o insurer was liable when W had seizsure and drowned in
river Rea
Some US jurisdiction – last cause in time – not proximate cause
o Continental Insurance Co v Arkwright Mutual Insurance Co
(1996)
building damaged by 1992 NYC storms – flood
damaged – caused electrical arcing – led to explosion
which damaged circuit boards
looked at spatial and temporal remoteness – drew on
Bird (1918) – flood to electrical damage – negligible
distance
insurer tried to avoid – flood covered, electrical
damage
Court approved trial judge ruling – flood was the
cause, not the electrical arcing – looking at last in
time – flood viewed as being within timeframe as it
was rapid – not a drawn out timeframe had it been
months between flood and explosion conclusion may
have been different
reasonable business person test
Leyland Shipping Co Ltd v Norwich Union Fire Insurance Society
Ltd [1918] – Lord Shaw
o wrong to treat proximate cause as proximate cause in time
look at proximate in efficiency
o HoL : rejected Escher’s distinction and approved Reischer
o Pink v Fleming (1890) – Lord Escher MR
distinguished marine (look at last cause) v non-
marine (prepared to look back further)
o Reischer v Borwick (1894) – Lindley LJ
agreed with Escher in Pink but didn’t apply distinction
in practice
o Syarikat Takaful Malaysia Berhad v Global Process Systems
Inc (The Cendor Mopu ) [2011]
recent approval of Leyland
Athel Line Ltd v Liverpool & London War Risks Insurance
Association Ltd [1946] – Lord Greene MR
o matter for the common sense and intelligence of the
ordinary man
Gray v Barr [1971] – Lord Denning
o effective or dominant cause of the occurrence is to be
determined by common sense – even if it is more remote in
time
o Yorkshire Dale SS Co Ltd v Minister of War Transport [1942]
– Lord Wright
must look at what the common man, not a scientist,
would understand it to be
o Tate Gallery (Trustees) v Duffy Construction Ltd [2007] –
Jackson J
causation tends to coincide with common sense
The Cendor Mopu [2011] – Lord Mance
o Facts: offshore oil-drilling platform – tow from US–Malaysia
– policy covered all risks except loss caused by inherent
vice or nature of the subject matter insured
o mid way through journey hit by wave – one leg broke – next
day two others too – perils or inherent vice?
o insurers knew of stress cracks in legs – required rig to be
checked mid-voyage – weather = normal for voyage
o SC : s55(1) – enquiry based on fact and common sense
principles reaffirmed proximate cause = proximate in
efficiency
o Insurer liable – proximate cause perils of sea – wave broke
first leg, caused others to break could only have avoided
if it was caused solely by defect in insured object without
any ‘fortuitous external accident or casualty’
o last cause in time could explain strict approach taken to
warranties in Victorian times – previous breaches would
have been irrelevant ∴ warranties needed to be strict
o PP doesn’t make policy void – makes it unenforceable by
the criminal – contract lawful on face but carried out
unlawfully not void
contract to insure death by cocaine bursting
unenforceable, but one to insure against death and
death occurring through illegal act enforceable by
innocent beneficiary
o Major J : delivered majority decision
main reason to use PP is because the insurer hasn’t
provided for provision in policy
Insurance Law in Canada (Brown) – denying recovery
to an innocent beneficiary would be to penalise them
for the insured’s anti social behaviour
parties intention is important – of criminal act is
incidental to the contract, may even be
enforceable by criminal insured
differentiation between (backed up by MacGilivray
and Chitty)
1) insured indemnified against type of loss
suffered (death) but that loss arises through an
unlawful act in that case enforceable
2) contract of insurance is itself illegal not
PP rule change:
arbitrary to have distinction between refusing
claim on PP grounds to criminal and
beneficiaries through will v beneficiaries named
on policy
looks at Diplock LJ in Hardy – doesn’t modify
rule, leaves it to legislature or another court
based on facts to modify it clear dislike of
the rule as it stands (strict PP test) and
attempting to assert pressure to bring about
change of the rule
o L’Heureux - Dubé J :
“While a crime may prevent a person from benefiting
from that crime, it cannot affect the rights of
innocent third persons”
forfeiture rule based on PP is there to manage the
transfer of risk – criminal shouldn’t benefit, but
neither should insurance co get benefit of premium
without risk
alteration of PP rule should be done by legislature –
must carefully balance competing rights
if rule is bringing about harsh results should look at
the rule itself and change it – rather than on a case
by case basis
should not relax PP rule to allow a criminal to benefit
from his action, but should relax the forfeiture rule to
balance competing interests, particularly where the
beneficiary is innocent.
Courts won’t enforce an illegal contract
will enforce property rights acquired through illegal contract –
once claim made without relying on contract or can only be
defeated relying on contract
Deliberate Killing and the forfeiture Rule
Forfeiture Act 1982, s 1(1) – PP rule – prevents a person who has
killed another from benefiting from it
o even if domestic abuse or suicide pact
s5 – unless convicted of murder the courts can modify rule if they
see fit based on facts (s2(2))
*In the Estate of Cunigunda (otherwise Cora) Crippen, Deceased
[1911] – Evans P
o it is against what the public would want for the law to
enforce a contract based on a criminal act
o Dr Crippen hanged for murdering wife – estate not allowed
to claim of policy on her life
o valid contract – unenforceable by C or estate
o legal fiction allowing insurer to keep premiums and not pay
out – W not benefitting
The Prince of Wales & Association v Palmer (1855)
o policy void as Palmer could benefit by killing insured
Innocent beneficiaries:
*Cleaver v Mutual Reserve Fund Life Association [1892]
o Facts: W (Florence Maybrick) killed H – she couldn’t benefit
– her claim ignored– policy terms – reverted to estate of H
o Fry LJ : courts won’t support enforcing a claim based on a
criminal act – excludes criminal and all those claiming
under them, but won’t exclude alternative or independent
rights – protect an innocent beneficiary
o Lord Escher MR : has to be a causal connection between
crime and loss – contract is made contrary to PP can’t
enforse in law or equity – where PP is being used to avoid
when full consideration has been paid – rule should be
narrow – shouldn’t go any further than PP requires
Brown v American Internation Lif Co (1991)
o if beneficiary didn’t commit or scheme to commit criminal
act leading to death can recover
o wife died setting fire to house – husband could collect
Mackender v Feldia AG [1967] – Denning MR
o an innocent beneficiary can collect even where another
beneficiary is responsible for the death
o approved by Oldfield – SC Canada
Beresford [1938] – Lord Atkin
o would have been decided differently if suicides will not
claiming – no decision on third parties claiming – diff
attitude to suicide – if parties agreed exclusion time then it
would likely be followed
o offender shouldn’t benefit – shouldn’t be able to dictate
who will
Davis v Boston Mutual Life Insurance Company 351 NE 2d 207
Rule applies in a lot of cases
*Re S decd [1996] – convicted of murder, diminished
responsibility or provocation pleaded successfully – forfeiture still
applies
o court can consider provocation in deciding whether to alter
rule or not if it isn’t a murder conviction
Re K decd [1985]
o court consider moral culpability and financial position of
offender
*Re Giles [1972] – confined under mental health act – not
punished rule still applies
doubt if criminally insane
*Dunbar v Plant [1998] – Mummery LJ – CoA
o Elderly couple – incurable diseases – irrational desperation
or depression – criminally complicit in suicide pact
o crime must be deliberate and intentional resulting in death
of insured – nature of crime will determine that forfeiture
rule will apply
o violence doesn’t need to be used to kill the person – gas or
poison, if intention to kill – are sufficient to prevent claim
o Philips LJ : forfeiture should apply – where DPP declined to
prosecute due to suicide pact – court should follow lead
o no benefit in applying forfeiture – should be leniency – if
lead by one then would be diff
*R v Chief National Insurance Commissioner [1981] – Lane CJ
o doesn’t need to be a criminal conviction – not label on
crime = nature
*Gray v Barr [1971]
o Facts : B thought W had affair with G – went to G house with
gun – fired into ceiling – approached G – fight – shot fired –
G killed – B cleared of manslaughter – G’s wife sued B’s
liability insurance
o CoA : policy designed to cover B’s negligence
o Denning MR : two possibilities
1) shooting deliberate = no cover
contrasted hunting accident – accidently shot
person not animal = no intention = even if
gross negligence reduced it to manslaughter –
covered by accident insurance as intended by
policy
no separation here – entered home with
intention to shoot, even if result from second
unintended shot = linked
deliberate act so closely linked can’t
be seperated
2) civil court not bound by criminal court – Denning
thought he should have been convicted
o Philimore LJ : two shots can’t be separated – second shot
not unexpected given circumstances – reasonable objective
person would expect it and wouldn’t believe B’s version of
events
o Salmon LJ: separated shots – but implied in term
preventing recovery where accident happened while
threatening with a loaded gun would have denied on PP
basis either – should discourage public using guns
o Lane J : did person seeking indemnity use “deliberate,
intentional and unlawful violence or threats of violence”?
yes = no indemnity, even if death unintended
Academics dislike G v B but judges like it and follow it
o followed and cited by Canadian SC
No clear ratio from G v B – supports view court will look at
insured’s act – decide if there was a deliberate criminal intent
towards victim – even if no criminal conviction
what happens if third party is killed – Lane J test suggests
violence must be towards person killed, third party could claim,
but not definitively defined
Modification
Re H (Deceased) [1990] – Peter Gibson J
o suggested act could modify rule if the manslaughter didn’t
involve intentional deliberate threats or violence
*Dalton v Latham [2003] – Patten J
Articles to be read on this case – a lot of discussion in book
- J.A. Jolowicz, “Liability Insurance—Manslaughter—Public Policy” [1970] CLJ 194-J.G. Fleming, “Insurance for the Criminal” (1971) 34 MLR 176-R.A. Hasson, “The Supreme Court of Canada and the Law of Insurance 1975” (1976) 14 Osgoode Hall Law Journal 769 at 776–8
o sceptical of Re H – parliament could have excluded rule for
diminished responsibility but didn’t
Jones v Roberts [1995] – Kolbert J
o Re H not sited by CoA Royse v Royse [1984] – same facts -
shouldn’t be allowed to benefit from crime higher court
would need to rule before it would be allowable – battering
with hammer, even if diminished – shouldn’t be able to
benefit
Motor Manslaughter
*Tinline v White Cross Insurance Association Ltd [1921]
o speeding – Shaftesbury avenue – killed one, injured two
pedestrians – convicted manslaughter gross or reckless
negligence
o Ballihavhe J : generally negligence negates cover – motor
policy must include cover, even if negligence liable
o G v B: similar, but B entered G’s house = intention
o manslaughter requirement higher for motorist
*Hardy v Motor Insurers’ Bureau [1964]
o CoA : act deliberate and criminal – insured driver already
paid victims, driver couldn’t recover indemnity from
insurers – insurer only liable in driver can’t pay, if no
insurance Motor Insurers’ Bureau liable (Road Traffic Act
1988)
*Gardner v Moore [1984]
o HoL : convicted of inflicting grevious bodily harm
o deliberate nature – already paid, can’t recover
o approved Diplock LJ statement in Hardy look at social
harm of enforcement v not enforcing
o Denning MR in Hardy: motorist can’t recover sums paid –
but the law by requiring motorist to be indemnified – policy
must be read so wide that a third party won’t be tainted by
a motorists intent can recover from insurer
difficult to distinguish motor cases from G v B on PP grounds –
both dangerous to a third party – victim suffers by not holding
them liable
Perpetrator not deterred by criminal sanction – lack of insurance
not likely to work
o not wanting to indemnify criminal v compensating
malicious acts of motorist motorists – compensation won
o what’s the diff between someone with a shogun and driving
licence when both act recklessly?
Criminal courts should decide criminal matters – civil should
focus on parties and compensation – like with motor insurance
only looking at injuries
no PP reason for indemnifying insured where not provided for in
contract – leg is only thing helping motorists
o must have certain level of liability – limits ability for
insurers to restrict this
o Charlton v Fisher [2002]
CoA : driver deliberately steered into another car –
didn’t intend to injure private land – RTA 1988
didn’t apply – insurer not liable due to deliberate
criminal act
o shows leg is only thing differentiating motor from other